2026 GS Paper I, all questions

UPSC Prelims 2026 · GS Paper I

Question 90: Economy and Social Development

Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct ?

aUPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency.
bIn case of UPI, settlement for end users happens instantly as the money gets immediately debited or credited but in case of Digital Rupee, there is no settlement as the wallet balance gets transferred to another wallet.
cUPI transactions are recorded by banks and reflected in bank statements but in case of Digital Rupee, no data is captured in bank statements as transactions are from one wallet to another.
dIn both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.

AnswerUPSC’s answer is (d).

UPI is a real-time payment system that moves money between bank accounts, so the liability stays with the banks as deposit liabilities. The Digital Rupee is a digital form of sovereign currency issued by the RBI, so the liability lies with the RBI as for a banknote. The statement that in both cases the liability lies with users and their banks is therefore wrong, and the question asks for the incorrect one.

Why each option is right or wrong
  • (a) Correct: UPI is real-time, and the Digital Rupee is like sovereign currency.
  • (b) Correct: UPI settles instantly between bank accounts, while a Digital Rupee transfer moves a balance between wallets.
  • (c) Correct: UPI shows in bank statements, whereas wallet-to-wallet transfers are not captured there.
  • (d) Right (the incorrect statement): Digital Rupee is a liability of the RBI, not of users and banks.

Only the provisional key (27 May 2026) was found; the final key replaces it when found.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2026, General Studies Paper I, Series A. The paper on upsc.gov.in.